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Teague-Strebeck Motors Inc. v. Chrysler Insurance Co.3/8/1999
gainst the claims. Given this honest mistake, Rule 1-017 permitted joinder of Mills-Strebeck as a plaintiff, with the joinder treated as if it had occurred when the original complaint was filed. We find no abuse of discretion by the district court in granting the amendment adding Mills-Strebeck as a plaintiff. See Crumpacker, 16 (ruling on motion to amend is reviewed for abuse of discretion).
{12} Because recognition of Mills-Strebeck as a proper plaintiff moots any claim by Teague-Strebeck, we confine our Discussion in the remainder of the opinion to the claims of Mills-Strebeck.
III. BAD FAITH DAMAGES
{13} The district court concluded that Mills-Strebeck was entitled to $75,000 in damages from Chrysler "for injuries it received to its business reputation as a result of [Chrysler's] bad faith adjustment of its claim." Chrysler's brief in chief points out that the Conclusion does not state explicitly whether it relates to the handling of claims for damages to dealership property or claims for damage to customer vehicles. As we understand the court's findings, however, the damages arose from customer ill will created by delay in handling their claims. Several findings address delays by Chrysler in acknowledging full coverage of customer vehicles under the GKLL provision of the policy. We note two findings in particular. Finding 152 states:
"At no time between the fire and the time that the litigation herein commenced did [Chrysler] bring to the attention of [Mills-Strebeck] that the GKLL written on all of the other Strebeck auto entities was written on a primary basis, which would obviate the need for assessing fault and would allow for the direct payment to customers for their damages suffered while in the Strebeck auto entity shop."
Finding 154 states:
"The inability of [Mills-Strebeck] to address the damages incurred by its customers as a result of the fire created ill will among the customers whose vehicles were damaged by the fire and damaged the reputation of [Mills-Strebeck]."
In our view, these and other findings by the district court, none of which are challenged by Chrysler, suffice to support a Conclusion that Chrysler acted in bad faith in handling the GKLL claims.
{14} Chrysler contends that regardless of such findings, it cannot be held liable for bad faith because its obligation to pay in this case was predicated on Rudel's misrepresentations, not on any contractual duty. It relies on language in Charter Services, Inc. v. Principal Mutual Life Insurance Co., 117 N.M. 82, 868 P.2d 1307 (Ct. App. 1994). We wrote:
" he concept of bad faith failure to pay in the insurance context does not arise unless there is a contractual duty to pay under the policy.
Plaintiff's claim of bad faith apparently was based on Defendant's refusal to pay everything demanded as a result of [the agent's] misrepresentations. However, absent any contractual obligation to pay under the policy, we do not believe the concept of bad faith comes into play." Id. at 88, 868 P.2d at 1313.
Chrysler asserts that because the district court here did not conclude that there was a contractual duty to pay under the Chrysler policy, it was improper to award any damages for bad faith. It argues that bad faith damages cannot arise from "imputed coverage based on negligent misrepresentation."
{15} We do not read Charter Services so broadly. In that case the agent had represented to the plaintiff that a comprehensive group medical insurance policy "would cover on-the-job injuries suffered by [Charter Services'] employees, and that, if [Charter Services] bought the policy, it was
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